Modi assures support for Posco plant to Korean head

Both the leaders met at Korea-India summit and discussed various issues faced by Korean companies in India

Prime Minister Narendra Modi, who met South Korean President President Park Geun-hye at Myanmar yesterday, has offered full support for the establishment of the mega steel plant proposed by Posco in Odisha, according to a statement issued by the Korean government.

“With regard to the Posco project, he (Modi) expressed his full support for it and said, he would make efforts with the Odisha state government to resolve any outstanding issues,” said a release posted on the website of South Korea government.

Both the leaders met at Korea-India summit, organised on the sidelines of East Asia Summit, held at Naypyitaw, Myanmar and discussed various issues faced by Korean companies in India.

During the discussion, Geun-hye raised the issue of delay in allocation of a captive mine in favour of the steelmaker, which has maintained that it will not invest in plant construction until the mining lease has been granted.

“Taking note of the delay in addressing the issue of the right to mine exploration, which is key to Posco-India’s commencing the construction of a steel plant in Odisha, President Park requested the Prime Minister’s interest in this mega investment project,” said the statement.

Despite ordered of the Supreme Court of India for allotment of an iron ore mine in favour of Posco in May last year, things have not moved in favour of the Korean company due to differences between the state government and central government over allotment of the area for prospecting licence (PL). The Union government had returned the lease recommendation files sent by the Odisha government twice, asking it to follow proper procedures, which included separate recommendations for notified and non-notified areas. Earlier this month, the state government sent a revised recommendation, requesting the Union government to grant PL for the notified area of 2,083 ha in Khandadhar iron ore deposit area, instead of earlier proposal of 2500 ha.

The Centre has not taken any decision yet whether to accept or reject recommendation of Odisha. A PL can be issued for maximum period of three years, followed by reconnaissance permit and mining lease and is considered as a preferential right document in favour of the licensee.